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2013 Medicare update

By: Marilyn Tavenner, Acting CMS Administrator

We’re now past the halfway point for Medicare’s annual Open Enrollment period, which opened on October 15 and closes December 7. As you and your loved ones with Medicare sit down to consider your options for 2013, we’d like to share the latest news about Medicare.

Our Administration is committed to making Medicare stronger for you and future generations. Thanks to the health care law, everyone on Medicare can get preventive services like mammograms and other cancer screenings for free. The health care law also makes prescription drugs more affordable for seniors who hit the donut hole.

These new benefits are making a difference for millions of Americans. 5.6 million seniors and people with disabilities have saved $4.8 billion on prescription drugs since the law was enacted, and during the first nine months of 2012 over 20.7 million people with original Medicare got at least one preventive service at no cost to them.

These and other parts of the law will result in significant savings. We estimate that the health care law will save the average person in traditional Medicare $5,000 through 2022. Earlier this year we projected that the standard premium for Medicare Part B (which covers certain doctors’ services, outpatient care, medical supplies, and preventive services) would rise by more than $9.00 a month in 2013. Today we announced that the actual rise will be lower—$5.00—bringing 2013 Part B premiums to $104.90 a month. By law, the premium must cover a percent of Medicare’s expenses; premium increases are in line with projected cost increases. Medicare Part B premiums have gone up slowly over the past five years – an average of less than 2 percent a year, or $8.50 total.

Several other changes in 2013 include:

Medicare Part A Premium: Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Only about 1 percent of people with Medicare pay a premium for Part A services—you need to have paid Medicare payroll taxes for 40 quarters of employment or be married to someone who did. For those few affected, the 2013 Part A premium is decreasing to $441, down from $451 in 2012.

Medicare Part A Deductible: This deductible is the cost to people with Medicare for up to 60 days of Medicare-covered inpatient services in the hospitals for each benefit period (a benefit period starts the day a patient is admitted and ends when the patient has been out of the hospital for 60 days in a row.) This will increase to $1,184 in 2013, up from $1156 this year (an increase of 2.4%).

Medicare Part B Deductible: The deductible will increase to $147 in 2013, from $140. This is still $15 below the deductible in 2011.

Income-related Adjustments: People with Medicare who report 2011income above $85,000 a year ($170,000 filing jointly) are legally responsible to cover a larger portion of the cost of their coverage. These premium adjustments range from $42.00 to $230.80 a month for Medicare Part B.

As Open Enrollment finishes up and we approach a new year, people with Medicare can be assured they are part of a program that strives to deliver better benefits while curbing costs. And we will continue to do all we can to make Medicare even stronger.